Mudrex, the crypto investment firm from California with Y-Combinator’s support, plans to offer U.S. spot Bitcoin ETFs to India’s investors. Both institutional and retail segments in India will benefit from this innovative service. Edul Patel, Mudrex CEO and co-founder, emphasizes the significant advantage this service provides, especially to institutional clients.
The introduction of four spot ETFs marks Mudrex’s initial step into this new offering. The ETFs come from leading firms like BlackRock, Fidelity, Franklin Templeton, and Vanguard. Mudrex operates in the European Union, holding licenses in Lithuania and Italy, and extends its services through a subsidiary in India registered with the Intelligence Unit.
The service targets institutions primarily, distinguishing Mudrex as the pioneer in India for institutional access to bitcoin ETFs. Retail clients have previously had access through U.S. stock investment firms, but Mudrex’s service broadens the scope.
Legal Framework and Investment Strategy
Under the Liberalised Remittance Scheme (LRS), Indian investors can diversify into bitcoin ETFs. The LRS permits annual overseas investments up to $250,000. Mudrex sets the investment range from $5,000 to $250,000, catering to varied investor capacities. The scheme ensures a broad spectrum of investment opportunities in bitcoin.
With a focus on smooth transactions under the LRS, Mudrex relies on robust U.S. banking partnerships. About 20 institutions, from a collaboration pool of 350, are initiating their investment processes with Mudrex. The anticipated average investment amount stands at $110,000.
Regulatory Environment and Digital Advancements
India’s regulatory landscape for cryptocurrency remains complex. The Reserve Bank of India (RBI) has shown resistance, citing economic risks. Conversely, the Finance Ministry seeks to integrate crypto services within regulatory measures for investor and economic protection.
The Indian government has ramped up efforts against crypto-related illicit activities, notably targeting entities involved in scams under the Prevention of Money Laundering Act (PMLA). This move underlines a strict stance against digital currency misuse.
In parallel, the RBI is progressing towards digital innovation. The development of the central bank digital currency (CBDC), the digital rupee, aims at financial inclusion. The initiative seeks to extend digital currency benefits to regions lacking internet access, promoting broader digital financial service access.